Terraform Bankruptcy Admin Sues Jump Trading for $4B Over TerraUSD Collapse: Report
Todd Snyder, the court-appointed plan administrator for Terraform Labs, has filed a $4 billion lawsuit against Jump Trading, its co-founder William DiSomma, and former Jump Crypto president Kanav Kariya in U.S. federal court. The suit alleges Jump Trading entered undisclosed agreements with Terraform Labs, which enabled Jump to profit by billions of dollars while masking fundamental flaws in the TerraUSD stablecoin. Jump is accused of illicit market manipulation, self-dealing, and misuse of assets that contributed directly to the Terra ecosystem’s May 2022 collapse, which wiped out over $40 billion and triggered broader crypto industry failures leading to insolvencies like the collapse of FTX. The complaint claims Jump and Terraform coordinated efforts to restore TerraUSD’s dollar peg for public optics, while allowing Jump to buy and quickly sell deeply discounted LUNA tokens. Terraform Labs, which declared bankruptcy in January 2024 and later settled SEC fraud charges, seeks to recover funds for creditors and hold Jump responsible for exploiting the ecosystem. Do Kwon, Terraform's co-founder, has been sentenced to 15 years in prison in the U.S.
